Cisco Set To Change Server Game Again With UCS 2.0

Cisco Systems Vice President Paul Perez Tuesday told investors that the company is getting ready to shake up the server market again with its big data-focused Unified Compute System (UCS) 2.0.

"We are in the midst of executing what we call our UCS 2.0 strategy, and that is focused on data-intensive applications," said Perez, general manager of San Jose-based Cisco's compute systems business, in a fireside chat at the Raymond James Systems, Semiconductors, Software & Supply Chain Conference in New York. That UCS 2.0 effort will be optimized for big data, including a focus on data analytics and the ability to create heterogeneous environments globally in complex Web service provider environments, said Perez.

Cisco's initial UCS system was launched four years ago, with many in the industry skeptical that the networking leader could establish a foothold in servers. Today that disruptive Cisco converged infrastructure offering is a $2 billion-plus business that grew 44 percent in the last quarter, according to the company.

Perez, who joined Cisco in November 2011 after a 27-year career at server market leader Hewlett-Packard, said Cisco is acquiring 1,000 new UCS customers per month and now has about 28,000 unique UCS customers.

Cisco is also working to integrate into UCS 2.0 its acquisition of solid-state storage company Whiptail, which it bought in September, said Perez. He said the Whiptail acquisition is aimed at "optimizing" UCS for performance and creating lower total cost of ownership for customers.

"What we saw validated through a lot of customer engagements was a need to highly integrate application acceleration with solid-state [technology] into compute environments," he said. "There is a structural change happening in the market where there are use cases that have historically been more identified with the storage domain. Those are moving more toward the compute environment."

Cisco had to make a critical decision on whether it wanted to own the solid-state storage capability or partner with a storage provider and decided to buy Whiptail, said Perez. "We see ourselves moving aggressively against our compute competitors, wanting to be first in accelerating converged infrastructure," he said.

Cisco has been upfront with regard to its UCS road map with its strategic storage partners including VCE, its strategic alliance with EMC and VMware, and its NetApp FlexPod relationship, said Perez.

Perez, in fact, said just last week he met with VCE CEO Praveen Akkiraju. "They feel comfortable we are not getting into storage, and we will continue to be good partners," he said of the VCE partnership. "They understand our decision. There is a structural change happening in the market."

Cisco is working on UCS 2.0 solutions that will include "theirs, ours or both" solid-state technologies, said Perez.

Mont Phelps, CEO of NWN, No. 88 on the CRN SP500 with $266 million in annual sales, said Cisco UCS has reshaped the server market's competitive landscape. "I'm amazed and impressed with what Cisco has been able to do in the compute market," said Phelps. "Who would have believed that they would impact the market as much as they have? It is incredibly impressive."

Key to Cisco's success with UCS was a sharp focus on optimizing the converged infrastructure for virtualization and private cloud, said Perez. "The [UCS development] team had the benefit of studying the market and looking at trends as an outsider moving into a new market opportunity," he said.